More healthcare-related regulatory news for plan sponsors, including links to detailed information.
President calls for one-year extension of small group and individual health insurance renewals
The president has announced an administrative fix that calls for a one-year extension of the canceled health insurance policies sold in the small group and individual markets, responding to criticism from those who “like their insurance” and want to “keep their insurance.”
Under the president’s solution, state insurance commissioners are encouraged to permit renewals of small group and individual health insurance policies that do not satisfy certain Patient Protection and Affordable Care Act (ACA) standards (e.g., modified community rating, guaranteed availability and renewability, and essential health benefits requirements).
Following the president’s announcement, the Department of Health and Human Services (HHS) released a letter to state insurance commissioners providing details about the transitional policy of nonenforcement. In that letter, HHS notes it “will consider the impact of this transitional policy in assessing whether to extend it beyond the specified timeframe.” The letter also indicates that HHS has conferred with—and received concurrence from—the Departments of Labor and Treasury on shared-jurisdiction issues.
To be eligible for the transitional policy, the HHS letter states that coverage had to have been in effect on October 1, 2013.
To read the entire HHS letter, click here.
CBO report includes benefits, payroll tax items among deficit reduction options
The U.S. Congressional Budget Office (CBO) has released “Options for Reducing the Deficit: 2013 to 2023,” a biennial report discussing spending cuts and revenue raises. The report’s release coincided with CBO Director Douglas Elmendorf’s appearance before the House and Senate conference committee that is negotiating a fiscal year 2014 budget resolution. To avoid the across-the-board spending reductions required by the Budget Control Act’s sequestration cuts, lawmakers might consider components of the CBO’s report. In addition, the CBO’s options are expected to be considered by the congressional tax writers who are separately continuing to work on a tax reform plan.
The 361-page report, which contains more than 100 options for altering spending and revenues to reduce the federal budget deficit, includes the following items of interest in the employment/benefits arena:
• Increase federal insurance premiums for private pension plans
• Reduce tax preferences for employment-based health insurance
• Further limit annual contributions to defined contribution (DC) retirement plans
• Include employer-paid premiums for income replacement insurance in employees’ taxable income (i.e., subject the following to the individual income tax and the payroll taxes for Social Security and Medicare: the Federal Unemployment Tax Act [FUTA]/state unemployment program taxes; 50% of the premiums for workers’ compensation; and the portion of insurance premiums or contributions to pension plans funding disability benefits)
• Include all income that U.S. citizens earn abroad in taxable income
• Increase the maximum taxable earnings for the Social Security payroll tax
• Expand Social Security coverage to newly hired state/local government employees
• Increase the payroll tax rate for Medicare hospital insurance by one percentage point
To read the entire report, click here.